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Supreme Court Clarifies Rules for Patentable Subject Matter

July 2010

In the recent Bilski v. Kappos decision, the U.S. Supreme Court reiterated the exceptions to patentable subject matter and made it clear that “business method patents” are not excluded from patentable subject matter.

In order to obtain a patent, an application must be directed to patentable subject matter under one of four categories of inventions, namely: processes, machines, manufactures, or compositions of matter. Although the machine, manufactures and compositions of matter categories are reasonably well-defined and easily understood, determining whether a particular process is patentable subject matter is more difficult. Over the years, the courts have struggled to define patentable subject matter with respect to processes.

Most recently, the machine-or-transformation test was considered by the Court of Appeals for the Federal Circuit to be the sole test for determining whether a process was patentable subject matter. According to the machine-or-transformation test, an invention claimed as a process is patentable only if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.

In Bilski, the Supreme Court made it clear that, although the machine-or-transformation test is a “useful and important clue, an investigative tool,” for determining whether a claimed invention is a patentable process, it is not the sole test for determining the patentability of a process claim.

In rejecting the Federal Circuit’s machine-or-transformation test, the Supreme Court indicated that the three specific exceptions to patentable subject matter previously set forth by the Supreme Court still stand. These three specific exceptions to patentable subject matter are: laws of nature, physical phenomena, and abstract ideas. Although the Supreme Court made clear the exceptions to patentable subject matter, the Court did not provide any new guidance regarding how to determine if one of the exceptions applies to a particular process claim.

In addition, the Supreme Court stated that there is no business method patent exclusion. Process claims for business methods are patentable subject matter as long as they do not fall under one of the three exceptions.

We will keep you apprised of new developments as the courts continue to define patentable subject matter more precisely.

If you would like to discuss the impact of this decision on your intellectual property, or discuss any other intellectual property concerns you may have, please contact one of the following attorneys:

Jeffrey M. Weinick Member (973) 530-2028
Jonathan A. Tyler Associate (973) 530-2086
Steven M. DiPasquo Associate (973) 530-2076
Kevin J. Beach Associate (973) 530-2158
Joseph G. Fenske Associate (973) 530-2128
Xiaolei Daniel Sun Associate (973) 530-2059